Facts:

• Respondents, spouses Alexander de Guzman and Natividad Mabalot, obtained a mortgage loan from the Development Bank of the Philippines (DBP).
• They used Transfer Certificates of Title Nos. 77533 and 76343 as collateral for the loan.
• Transfer Certificate of Title No. 76343 was leased to petitioner Prudencio S. Penticostes, Sr., while Transfer Certificate of Title No. 77533 was sold to petitioner Prudencio S. Penticostes, Jr.

Issue:

• (Unlock)

Ruling:

• The court ruled in favor of the respondents and dismissed the petition.
• The court held that the bank mortgagor cannot be compelled to surrender the duplicate title fo...(Unlock)

Ratio:

• The court based its decision on the mortgage contract between the mortgagor-spouses and the DBP, which stated that the mortgagors could not convey or encumber the mortgage property without the written consent of the bank.
• The court also relied on the provision of the CARP, which requires the registration of any sale, disposition, lease, management contract, or transfer of possession of private lands executed by the original landowner within three months after the effectivity of the act.
• The court concluded that since the mortgage loan had not been fully paid and the duplicate titles were in the possession of the DBP, the bank had the right to refuse to release the titles for registration.
• Therefore, the petitioners could not compel the DBP to surrender the titles for registration.

Additional Details:

• The mortgage contract executed by the mortgagor-spouses stated that they could not convey or encumber the mortgage property without the written consent of the mortgagor-bank.
• It was legally and physically impossible for the respondents to surrender something that was not in their possession.
• The petitioners failed to show any legal basis for the surrender of the titles held by the DBP as collatera...continue reading